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To Win Big, Think Long-Term

Q: How does one of the best investors of our time think about investments?
A: In decades, not days.

Warren Buffett has a remarkable track record for investing, but not because of “unicorn” companies or wild-startups, his success is largely attributed to his ability to think long-term. 

In this letter to Berkshire Shareholders he shares how ordinary returns become incredible results when you let them compound for decades. 

“In August 1994 – yes, 1994 – Berkshire completed its seven-year purchase of the 400 million shares of Coca-Cola we now own. The total cost was $1.3 billion – then a very meaningful sum at Berkshire.

The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million.”

“These dividend gains, though pleasing, are far from spectacular. But they bring with them important gains in stock prices. At yearend, our Coke investment was valued at $25 billion…”

Don’t sabotage future success by focusing too heavily on the short term. Think in decades, not days. 

Actionable Question: What’s something that could compound and grow if I stopped interrupting it? 

-Andrew Nemeth